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ImmunoGen, Inc.: Waiting to Move FORWARD

A clinical trial for the biotech's lead drug matters more than earnings.

ImmunoGen(NASDAQ:IMGN) reported earnings on Friday for the quarter that ended in December. The company is switching from a fiscal year that ends in June to one that ends in December, so this report concludes the two-quarter transition period.

Of course what the quarter's called -- or even what the numbers themselves are -- doesn't really matter all that much to the company. With limited revenue (mostly from partners), investors should be more focused on what management said about the pipeline of drugs than revenue and earnings.

Image source: Getty Images.

ImmunoGen results: The raw numbers

Metric

Quarter Ending December 2016

Quarter Ending December 2015

Year-Over-Year Change

Revenue

$13.8 million

$18.0 million

(23%)

Income from operations

($28.6 million)

($28.2 million)

N/A

Earnings per share

($0.39)

($0.38)

N/A

Data source: ImmunoGen.

What happened with ImmunoGen this quarter?

The first patient in the phase 3 FORWARD I trial testing mirvetuximab soravtansine in platinum-resistant ovarian cancer was enrolled in January.

What management had to say

ImmunoGen's chief medical officer, Anna Berkenblit, updated investors about where the company is with dose escalations for the FORWARD II trial testing mirvetuximab soravtansine in combination with Avastin, carboplatin, Doxil, or Keytruda: "At this point, we have been able to give the highest dose of mirvetuximab soravtansine, which is 6 milligrams per kilogram -- identical to the monotherapy dose -- in combination with each of the highest dose for each of the combination agents -- and those are the monotherapy doses that are typically used in ovarian cancer." The lack of dose-limiting toxicity when used in combination is hopefully a good sign that two-drug combinations will work better than either drug alone.

Chief Financial Officer Dave Johnston said there's potential to raise cash through out-licensing some of its pipeline assets. "In looking at our portfolio, we decided that, while we are enthusiastic about our DLBCL compounds, we have to focus. And, in deciding to focus on mirvetuximab and the AML products, we chose to monetize the DLBCL assets and conversations are under way right now," Johnston said, noting that the AML products could also be monetized through co-development deals where ImmunoGen would maintain commercial rights in North America.

Looking forward

Management is shooting for approval of mirvetuximab soravtansine in ovarian cancer by 2020, so investors need to be a little patient. Fortunately, data from the phase 1b/2 FORWARD II trial is expected in the second quarter. And around that time, investors will also get to see pooled data from over 100 ovarian cancer patients treated with mirvetuximab soravtansine in various phase 1 trials. Positive data from those trials should give investors confidence that the FORWARD I trial will turn out positive.

Further back in the pipeline, IMGN779 is set to report data from a phase 1 clinical trial in patients with acute myeloid leukemia in mid-2017. And ImmunoGen plans to get FDA approval to start clinical trials on a new drug candidate, IMGN632, in the third quarter.

Management is guiding for having $35 million to $40 million in the bank at the end of this year, but that doesn't include any potential deals between now and then, so hopefully the nest egg will be larger -- because that's not enough to get the company through a 2020 readout of FORWARD I.